Introduction to Neem Cake Project Report, Manufacturing Business Plan in India: Neem cake is popular organic manure obtained as a by-product during the Neem oil extraction process from Neem seeds/fruits either from oil expellers or by the solvent extraction process.
Neem cake organic manure is commonly used for decades in India as manure for soil application, mainly in southern states such as Tamil Nadu, Karnataka, and Kerala.
Neem cake organic manure includes organic nutrients such as Phosphorous, Nitrogen, Potassium, Magnesium, Calcium, etc., along with Sulphur and bitter Limonoids. Neem cake organic manure is a proven soil enhancer and it is being used directly or as a mixture with other manures such as Farmyard manure, urea, etc., because of the advantages like the presence of organic nutrients, pest repellent characteristics, and its impact on soil associated nematodes.
A guide to Neem Cake Project Report, Making Process, and Manufacturing Business Plan
Advantages of Neem Cake:
- A perfect organic manure and pest control agent for any crop and soil type.
- Acts as a natural fertilizer with pesticidal features
- Defends plant roots from soil grubs, nematodes, and other white ants
- Increases dry matter in Teak (Tectona grandis), Gum Arabic Tree (Acacia nilotica), and other forest trees.
- Also, helps as a nitrification inhibitor and delays the availability of nitrogen to the short duration and long duration plants.
- Enhances the efficiency of nitrogenous fertilizer application.
- Minimizes the demand for nitrogen in crop cultivation and hence reduces the expenses related to fertilizer application.
- The soil condition will be better and protects the soil when there is a drought-like scenario.
- Increases crop yield considerably.
Neem Cake as Organic Powder
Neem cake organic manure is majorly applied for crops such as fruits, sugarcane, tea, paddy, coffee, banana, vegetables, and spice plantations, and even for floriculture.
Neem cake organic manure manufactured and available in the mentioned forms and with respective oil content:
- Flake form with around 8% Neem oil content.
- Pellet forms that are in 6 mm size with about 8% Neem oil quantity.
- Powder form in 4 mm mesh size having minimum 4% oil percentage.
- Powder form in 4 mm mesh size having around 1.5 – 2.5% Neem oil quantity.
Neem Oil will help to cure skin ailments like inflammation, and it can decrease feverish body temperatures while decreasing joint and muscle pain during rheumatic disorders. Neem Oil can be applied topically to the skin which will restore moisture on the face while avoiding pathogens below the skin’s surface. Thus, it enhances face beauty and you will feel healthier and younger.
The Neem Oil obtained from the neem seeds has insecticidal and medicinal characteristics and is used as a pesticide as well.
The leaves of the Neem Tree are so helpful that they can treat chickenpox and warts. It is used as a paste formed by using leaves directly to the skin. Neem leaves to are used to prepare tea to decrease the fever in case of Malaria. Also, the leaves can be included in hot water for treating diseases like foot fungi. The foot can be soaked in the hot water for therapy. It is even used for relaxation and as a stress reliever by adding it to the bathwater in the tub. Skin infections like acne, scabies, psoriasis, and eczema can be cured because of the inherent anti-bacterial properties of Neem.
Neem cake organic manure is extensively useful for crops such as vegetables, fruits, sugarcane, paddy, banana, aromatic plants, etc. Neem Seed Cake is a very beneficial soil amending agent which endorses soil fertility and lowers nitrogen loss, even uses as a nematicide.
Business plan to start Neem Cake Manufacturing Business
Design a business plan based on that and even include the various strategies you have thought of for this business.
- Market potential of Neem Cake
- Presumptions and assumptions in Neem Cake Business
- License, permissions and registrations required to start Neem Cake Manufacturing Business
- Area or land required for starting Neem Cake Manufacturing Business
- Raw materials required for Neem Cake Manufacturing Business
- List of machinery required for starting Neem Cake Manufacturing Business
- Manufacturing process of Neem Cake
- Project economics of Neem Cake Manufacturing Business
Market potential of Neem Cake and Neem Oil
Global Neem Oil market size is expected to upsurge to million US$ by 2025, from million US$ in 2018, at a CAGR of during the estimating period. The neem oil market is categorized based on type, use/application, and region. Based on use, the market is segregated into pesticides for a farming segment, pharmaceutical companies, beauty, and cosmetics. Based on product kind, it is divided into seed extract oil, leaf extract oil, and bark extract oil. Based on region, it is segregated as North America, Asia-Pacific, Europe, and LAMEA.
Neem cake is also a potent agent which acts as a pest repellent, which ultimately favors the market expansion since it supports neem oil manufacturing. However, countries like Africa, which hold a smaller number of neem trees are forced to import them from Asian countries. This increases their expense of raw material procurement and thus manufacturing of the product. Therefore, these manufacturers are compelled to opt for alternative herbs, which may obstruct the growth of the neem oil market to some extent.
Presumptions and assumptions in Neem Cake Manufacturing Project
- The plant will be in operation for about 240 days per annum.
- The operating capacity is 60% for 1st year, 75% in the second year, 90% in the 3rd year.
- The interest on term loan for 12% per annum and on working capital will be 14% per year.
- You can expect profit percentage of 7% – 8% in the first year, later it increases based on the quality and marketing of your product.
Legal Compliances required for starting Neem Cake Manufacturing Project in India
For beginning the Neem Cake Manufacturing business, you must first decide the legal pattern of your business. You can plan to start with less capital and can register your business as a sole proprietor or any business entity available in your region. You should check the various essential permits and licenses that must be obtained from the local authority.
- Register your business with ROC
- Obtain Trade license
- Get SSI registration
- Factory license is essential
- Food operator license is mandatory
- BIS certification is a must
- “NOC” from the pollution control board
- AGMARK certification
- Fire license must be acquired
- FSSAI is mandatory, as Neem Cake Manufacturing business is classified under a food processing industry
Area required to start Neem Cake Manufacturing Business
The area or space required to start Neem Cake Manufacturing Unit is 500 – 800 sq. mt. This will depend on the scalability of your business. As you need to set up and establish the production unit required for Neem Cake Manufacturing Process.
Raw materials required to start Neem Cake Manufacturing Business
The major raw materials required are neem seeds, from which oil is extracted. The remaining part after extracting oil is used as Neem Cake.
The manufacturing process of Neem Cake
The residue material present after oil is extracted out from seeds and is commonly known as the seed cake; it is the best biofertilizer and aids in delivering the required nutrients to crops. It is greatly employed in farming to obtain a high yield.
Neem oil is an essential vegetable oil obtained using the fruits and seeds of the Neem tree, Azadirachta indica, which is the endemic tree to India and has been popular now in many other regions in the tropics. Neem seed oil is manufactured by solvent extraction of the neem fruit, seed, oilcake, or kernel.
Neem cake as organic manure saves plant roots from white ants, soil grubs and nematodes, because of the residual limonoid presence. It also works as a natural fertilizer with pesticide characteristics. Neem cake is majorly used in India as fertilizer for cotton, paddy, and sugarcane.
Neem Cake Project Report/ Economics of Neem Cake Manufacturing Business in India
In case if you miss this: Mustard Oil Project Report.
Land and building construction on a rental basis: Rs. 3,00,000.
Cost of Machinery: Rs. 2,39,500 .
Pre-operative expenditure: Rs.29,500.
Fixed capital investment:
- Machinery: Rs. 2,39,500
- Pre-operative expenses: Rs. 29,500
- Total: Rs. 2,69,000
Working capital analysis:
- Neem seeds 60 tons @ Rs. 2000/ton: Rs. 1,20,000
- Scented Neem seed oil 500 lit. @ 60/lit.: Rs. 30,000
- Packing materials (plastic containers, cartons, etc.): Rs. 20,000
- Total: Rs. 1,70,000
Utilities:
- Wood 30 quintals @ Rs. 120/qtl.: Rs. 3,600
- Electricity 300 KWH @ Rs. 3.00: Rs. 900
- Total: Rs. 4,500
Staff and Labour:
- Skilled labour: Rs. 10,000
- Unskilled labour: Rs. 7,500
- Salesman: Rs. 3,000
- Accountant: Rs. 2,500
- Peon: Rs. 2,000
- Total: Rs. 25,000
Other expenses
- Rent: Rs. 2,500
- Transport and travel: Rs. 2,000
- Telephone: Rs. 400
- Stationery: Rs. 100
- Publicity: Rs. 1,000
- Sale tips: Rs. 1,000
- Other miscellaneous expenses: Rs. 2,000
- Taxes and levies: Rs. 500
- Total: Rs. 9,500
Total working capital per month = 1,70,000 + 4500 + 25,000 + 9,500 = Rs. 2,09,000.
Total capital Investment:
- Fixed capital: Rs. 2,69,000
- Working capital: Rs. 2,09,000
- Total: Rs. 4,78,000
Cost of production (per annum):
- Depreciation on machinery and equipment @ 10%: Rs. 22,950
- Depreciation on furniture @ 20%: Rs. 2,000
- Recurring expenditure (per annum): Rs. 25,08,000
- Interest on total cap. Investment @ 14%: Rs. 66,920
- Total: Rs. 25,99,870
Turnover of Neem Cake Manufacturing Business
Neem seed oil turnover: Rs. 28,18,200 (Say Rs. 28,20,000).
Profitability in Neem Cake production
Profit = Rs. 28,20,000 – Rs. 25,99,870 = Rs. 2,20,130
Net profit ratio = Profit x 100/Turnover = 7.8%.
Break even analysis:
Fixed cost (per annum):
Total depreciation: Rs. 24,950
Interest @ 14%: Rs. 66,920
40% salary: Rs. 1,20,000
40% other exp. Except rent: Rs. 33,600
Rent: Rs. 30,000
Total: Rs. 2,75,470
B.E.P. = FC x 100 / FC + profit = 55%.
You may also check this: Neem Oil Extraction Method.
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